EQC - Earnings call transcript Q3 2021

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Operator

Greetings, and welcome to the Equity Commonwealth Third Quarter 2021 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Sarah Byrnes of Investor Relations. Thank you. ahead. go Please

Sarah Byrnes

Good discuss Donna. September thanks joining for XXXX. Thank Commonwealth's morning, results to Equity ending for us you, and the XX, quarter

yesterday the On constitute advised as laws. to our section that and release matters discussed reports supplement today. federal or Risk annual no from a Helfand, press and could are securities titled report conference XX-Q statements differ We forward-looking Griffiths, within certain the forward-looking the quarterly any call the this Forward-Looking materially that Weinberg, discussion of may any Bill be Form assumes you as David obligation and Statements cause statement. the statements to well to company section COO; President made Factors actual Please of CFO. during call factors today forward-looking refer in update on in CEO; issued Form titled on results David for XX-K meaning The

post financial important Today's remarks David We a these material. I Helfand. to at refer measures. results non-GAAP financial containing and information certain turn to over that, GAAP our non-GAAP be information Please including call of supplemental website also our to for press may include results. release that on With reconciliation our yesterday's will measures eqcre.com, the

David Helfand

to in occupancy same-property and in the the quarter loss, plans. income to XXXX. occupancy 'XX was the compared declined increase Net on property in free NOI Thanks, decrease quarter decreases. third quarter The a compared in and income Same Sarah. deal in update Same XX.X%, the for future to to was to an quarter the interest I'll third due company's declined the Good was X.X% of thoughts during briefly quarter 'XX lease FFO third due 'XX. Monmouth an property a third quarter in morning, some everyone. with income. termination the results on and due decrease 'XX Thanks quarter, for and third declined termination NFFO morning, the lease of joining in NOI us. rent. decrease then begin and of largely This cash XX.X% occupancy the our and XX.X% on the fee provide comment a commenced Leased decline decreases occupancy

cash approximately In We at we share. of the have to an billion $XX.XX a repurchased common balance additional shares approximately average subsequent million million total for our a an $X X of our or million. million of share, third $XX.X sheet quarter quarter, $XX We end year-to-date price of $XX.X of purchased $XX.X total investment stock. on a

of combination plus We've asked the million believe existing was were the have we buyback We and on didn't equals X shareholders to not companies MNR. why disappointed the authorization. support transaction, offer X did X the We a both share our upside company raise deal. Monmouth potential. been that classic $XXX offer X for obviously, our shareholders regard Monmouth With we remaining significant

and offer, what Our was acknowledge disciplined. do termination million of a to on with a to $XX I if answer expenses. working the we approximately transaction, we team connection have of did want for us, of job reimbursed successful. we the preparing fair in effort and were In fantastic were transaction. we is They we the our felt been the made EQC that determined full remain strong

for never look to have That Cap significant aren't night. as in. team for highly investment We at to to the We EQC does available, acknowledge opportunities. asset readily and Sam, for likely been as we EQC investment competition and well the ready that continuing where capital lower. equity competitive determine rates our winding face few last Debt environment There talking the capital that So leave for quietly and spent operating shareholders. are opportunities we're into compelling said, the for both we just steps. new next the shareholders, with arguments, and weeks down returning believe, Board, classes to things? to are most we're go

tremendous our have team. We confidence in

we have We execution and outperformance, of record track a optimistic and and engaged. remain

So opportunities. judgment pursue at to continue investment our best this to is time

our sector. future that Monmouth Some in shareholders industrial unsuccessful means have asked the will be if with investments transaction

Monmouth. deal is with the we answer evaluated before because the numerous We the were not Our upside. with that felt merger appropriate opportunities risks we necessarily. associated manageable given We engaged made and

both investments risks. open in As to sectors, for out specific considering the opportunities, opportunity look offer of the sector upside associated of a and and variety new in the we we're appropriate if favor,

shareholders notice we how It's to on reasonable much find the will ask opportunity. clarity would we longer to timing. right like Finally, continue effort more the

evaluate can have we're we'll don't pursuing shareholder the to maximize of I course clear the While that, happy questions. mindful of that we're is say value. a to to opportunity, and what answer, best With I cost answer action continue of

Operator

America. first [Operator question Bank Rodriguez from Elvis Instructions] Our is of coming of

Elvis Rodriguez

you sort you working can on at on Monmouth? light or shed X On industries and other things that of today versus, call were mentioned it, that months more ago sectors you on may you the looked deal, focused you potential Monmouth when transaction. be Any

David Weinberg

it's Elvis, Weinberg. David

respond your to question. Let me to try

at given of As sectors, we priced the variety and of those getting where was a were we've feedback some you past the in that on time. at sectors looked know, based

office, market. 'XX into spoke getting being of based compared to spoke us perhaps, example, forward. the relatively assets we the hospitality performing pandemic, those regardless multiples, priced bearish where For and numbers on were the We and 'XX going going today about about risk

little priced good a and wildcard. office strength markets, deals of believe more we and with the long-term viability we're good bullish seen and appropriately. maybe a in was Now hadn't however, Retail risk

Some malls redevelopment seen risk the centers, we Class are really reflect of grocery-anchored the perhaps and C cetera. pricing haven't opportunities, trading in et

early kind say of in previously. reengaging to perhaps provides Transaction different which of questions not spending sectors, clarity greater tell. pricing the increased I'd if volumes have little months, we've still been the weeks, on we some As a last those few had it's

as looking deals and we trying And transactions wide, continue we said what look. going still get see find, to where I'd become that say paid as close, to taking. the more previously, we're we're available, far larger we we're as risk opportunity think we're we'll more So the for David hopeful find to

Elvis Rodriguez

seeing what type you're sectors I that. type What -- that looking those are mentioned that capital at across plentiful. today? And David, portfolio appreciate David had of of you premiums is

David Weinberg

but and is capital I'd say quantify, sense, I it's think, following difficult most where what it's the flowing. seeing makes to you're intuitively, aggressively

flowing and capital of where be trying there's a cash assets placed. industrial So I think lot to multifamily, nice

You're may want as which seeing seeing trade, office because Conversely, and rotate office those a I you're have owners that types the premiums far portfolios. so office for concluded that's there one-off of better out portfolio portfolio those to of in it's discount than suggests be to not those think really a sell portfolios space.

Elvis Rodriguez

the be to sale of or perhaps? and a there? portfolio obviously Any of just maybe to space, any like like that's do up a ramp lease net lastly, have you a there opportunities leaseback. looking like And sort tenant relationships, a And might big big opportunities lot great

David Weinberg

asset, be us considering we're return to conclude something pretty the Well, on we do for across that. has compelling the to spectrum. just as market, we the isn't It profile, depending the it's And may look there. the credit

whether of be a type say So determined I'd to deal is it's that interest. of

David Helfand

I would guess add... I

Elvis Rodriguez

Dave. Yes. Go ahead,

David Helfand

credit I casino was to just plays creative been space. there done, that interesting the are that going add and type have of obviously

from something we're can others, risk explored that, could yields find available an we're a and where some have equity-based And than we find and likely, mispriced groups. and consider operating hopeful for We if an major we higher the might looking More food opportunity. yields are the opportunity. low credit-based we is

Operator

is Emmanuel coming Korchman of question next Citi. Our from

Michael Bilerman

to David, ahead Bilerman sort night Michael your appreciate figure here of up to go out things. to It's and don't trying pursue quietly with to continue wrap in or to Manny. comments of saying the I go and want whether

is Given public million, are that a sort running, point. this low, changing much at compensation fact so all that private income, you're plans? running cash, $XX fund all base it, Board call Effectively, maybe not management equity rates you earning within discussed have the level at you interest your that at you're have construct, the G&A of this

compensation on you can't So the balance the flow running yield But make potential at tie of on much cash negative sitting I you're you point, overall cash all -- earn sense negative cash a an does recognize that's to a deal that perspective, that flow a right? just to income negative, are there. fact running sheet. given lot from because, it have effectively, this you're you

David Helfand

what that just Just of -- the Mike. is thanks But out for you're recommending? question, curiosity,

Michael Bilerman

you been assume well, just -- was transactions? about, some what we compensated thought structure the phase, are there In discussed, And or discussion to whether would is -- should the boardroom It sat What about there the we being up. on I a whether is here? different are for thinking continue we how way? would a have I right question in right? have wrap that's continue No.

David Helfand

absolutely. Yes,

So discussions maybe we lens have, to just a for sure, had pull those bit. little back the

less million than investors $XX paying. a is cash. private to, million, is what on alluded And Our basically as equity you closer are G&A, running X $XX model, than point that's which to in the

relative upside. our time we're, structure, And that suggesting What long don't more going in of the there's come return the pursuit There's talking a of of risk a either we're of that I So a equity I don't I take would [PAS] any people period less incremental we we we're the of opportunity. we're about market from more of context say that's such maybe And to think and I work. I that's the probably happens is cost pure sure, cost think the part say unusual. a take line you're for of to an mindful is meaningful continued opportunity. know. think out standpoint, it's right capital pursuing of would that equity or small is and either but going way. in pretty sort it, don't have short the that of term. cost to having in current a find G&A

Michael Bilerman

part, were Over guess consistent that right, extraordinarily before you speed many and liquidating Well, have been things allowed you that's would how about have the with equity what it. old right? having that on portfolio admirable stepped sooner, value-add something COVID and a at would was that there during timing before opportunity, past. have done opportunities pounce hopeful that in come done the and would would one in even job, I did has Monmouth, to have the an think you team which know at time, you hoped, the I EQC I the have

a greater on just going it it so it's -- we terms months? a you something because there put talking comment was X sure that been time, hadn't is not than months? and out it Are of something long I And Or Is timing. that? more that's in XX of wasn't

David Helfand

Yes. fair. That's completely

I with think take today. We've to against things as decided identify wrestle we're specific trying to situation done what we on and to a lot, be period opportunistic in. based they forward. the we've and judgments come debate time trying make and a That's go

returns telegraph lined a NAV, trying result we're largely liquidate if years up, that short it's not we return and the and without already good have an opportunity find life. to done will years. which, can the over It's over term, of that think is a in shareholders the shareholders hope I in plan friction or which for we lot for we've

Michael Bilerman

can about that. And obviously, thinking one. Pretty good we on the that value cash, then NAV,

asset assets. turning at Obviously, little you bit. fundamentals all around values On about cash the think How shifted should are plan? and the helping office -- What's are remaining X? the on have those those How assets, and remaining even value sales the on about those process leveraging taking debt the extracting go-forward the and a you on maybe remaining not or proceeds? thinking them into we

David Weinberg

said think It's in Austin, David. X assets Well, in I've X sought fortunately, in after. I highly as Denver, go-forward before, terms plan, of the

the of necessarily to need to lot money those a way So much not markets. leasing trying in in values, to do those I'm we of maximize get incremental sure

highly I be to So well asset, then market. D.C., liquid smaller think going regardless. positioned And we they're a own

kind the there firm as that So is, be question will of should really plan, we up which the We're of not go-forward assets think and David when. a just referenced, sell is part I real we part which of analysis today.

Michael Bilerman

none in are on of... those the terms So of market today

David Weinberg

Correct. in We market have today. don't anything the

Michael Bilerman

Okay. years. And you -- then Helfand, want I be don't said just this David you years to and

a least trying I that sort of give XX-month this a So evaluation? be are you just XX is to could at months? reasonable months I'm to should us quarter, sense to in get time to right? XX Or frame of point. going some a keep next step it about how of on least decision of, us now, don't give -- we thinking of about So what the every think next sense you're asking terms want at right

David Helfand

I wish I had an answer.

to don't months, don't term. been we're and trying reward there's circumstances X time. XX, want change, while a because measured have and a something limit, That's if shareholders We optimistic, at way continue to if want go is word I we long we've in think telegraph this don't I want say not my don't we I back reasonable a we near but little years but I recognize another -- find and to there because years. are to want That's say longer. to to on it's to

Michael Bilerman

one. now in And serious on then worked just being form? right anything last Is any there

David Helfand

don't I serious. as Yes. what you define know

have sectors, are finding intriguing the that that's that in new. excited we've come before work We are about. into, multiple until Whether of multiple we're opportunities. get challenges deals they either previously sense effort are others worked can you that get little beginning on a in. what we things you some fruition, deeper a or don't on We're Obviously, to question. But another put

Operator

like you. Helfand comments. Thank now turn for would back I to Mr. closing to it

David Helfand

joining talking and Thanks, the morning. everyone, We us look you for to for at NAREIT, forward time. with thanks this

Operator

event. your thank and today's Ladies for This participation. concludes you gentlemen,

log disconnect or webcast your off may lines wonderful and a at day. have time, the this You

Equity Commonwealth (EQC) 28 Oct 212021 Q3 Earnings call transcript